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Updated: April 25, 2024

2024 IRS Form SS-8: Instructions + PDF Download

Published By:

Erin Ellison

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If you’ve reviewed the guidance and are still uncertain whether certain workers should be receiving a W-2 or a 1099-NEC — a decision based on whether they are classified as an employee or an independent contractor — you are in luck. The IRS has Form SS-8 to help.

Fact facts about Form SS-8

  • Form SS-8 is used to determine a worker’s employment status. Are they an employee or an independent contractor?
  • This determination allows you to accurately withhold income and employment taxes if necessary.
  • After filing Form SS-8, the IRS will send you an official letter with their determination of whether the worker should be classified as an employee or a contractor.
  • Form SS-8 asks questions about your business, the worker’s duties, how many employees/contractors your business works with, the nature of the work they do, and more.

It’s used to help determine the status of a current worker for federal employment taxes and income tax withholding as either an employee, or as an independent contractor.

Note: Form SS-8 was last revised in May of 2014, and does not reference the new Form 1099-NEC, though the criteria of eligibility is the same. Keep in mind that the determination from an SS-8 does not decide your workers’ status at a state level, only at the federal level. In addition, filing a Form SS-8 will not change the due date for your tax return, so if you are unsure of your worker’s status, you may want to file Form SS-8 early so you have the answer in time to file your taxes. If you don’t have a determination before the tax deadline, file your tax return anyways and file an amended return later (if necessary).

Just a quick note here about the term “firm” as it relates to the IRS, and specifically as it relates to Form SS-8. A firm is considered “any individual, business enterprise, organization, state, or other entity for which a worker has performed services. The firm may or may not have paid the worker directly for these services.”

What is Form SS-8?

Form SS-8 is an IRS form that is used to determine a worker’s employment status for purposes of income and employment tax withholdings. Businesses should consider filing an SS-8 if they’re unsure if the worker they hired is classified as an employee or an independent contractor.

 

What is an SS-8 form used for?

Form SS-8 is titled “Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding.” That might seem like a bit of a mouthful, but the form is easier to understand than it sounds. Basically, Form SS-8 is used to ask the IRS for an official determination of a worker’s employment status.

 

This form is filed when a business is unsure if one or more of their workers should be classified as an employee or an independent contractor. This is an important question because it will determine many of the business’ potential employer responsibilities, such as health insurance, retirement benefits, etc.

 

Also, if the worker is an employee, they are subject to employment and income tax withholdings, but if they’re an independent contractor, then they are not subject to withholdings. Filing Form SS-8 will clarify this issue and allow you to classify the worker(s) in question correctly.

 

Do I have to file Form SS-8?

While you are not required to file Form SS-8, you are required to properly classify and report all employees and independent contractors, using Form W-2 for employees, and Form 1099 for contractors. If you’re unsure of how to classify one or more workers, then it may be wise to file form SS-8 with the IRS to get an official determination of the worker’s classification.

 

In general, the IRS wants workers to be classified the same as other workers doing similar tasks. For example, if a restaurant typically classifies cooks as employees, then the IRS wants newly-hired cooks to be classified as employees too. If they typically classify cooks as contractors, then the IRS wants newly-hired cooks to be classified as contractors too. And while no one never recommends attempting to circumvent the IRS, it’s worth keeping in mind that filing Form SS-8 could open up your business to additional — and potentially unwanted — scrutiny over your classification of employees vs. contractors.

 

Before we get into the specifics, the first thing you’ll want to do is download a copy of Form SS-8 and take a few moments to review it.

Form SS-8 downloadable PDF (Rev. May, 2014)

The form will help you make an accurate determination of your worker’s status for tax purposes. Send it to the IRS once completed, and they will use the information provided to make a formal determination of the worker’s status.

You’ll also need:

  • Your company information including address, phone, email, and Employer Identification Number (EIN)
  • Your worker’s information including address, phone, email, and Social Security Number (SSN)
  • This information needs to be included on the form as you will see in the first screenshot below

How to complete Form SS-8

 

In addition to fields you’ll fill in, the IRS wants to make sure employers know that:

  • The information on the form may be disclosed to the business, the worker, or to the entity that pays the employee’s worker’s compensation, if that entity is different from your firm.
  • If you don’t know an answer to a question or field, enter “Unknown” or “Does not apply”.
  • If you need more space for an answer, attach an extra sheet of paper and clearly mark which section and question it relates to, along with either the firm’s name and EIN, or the worker’s name and SSN.

Part I: General Information

This section collects general information about your firm and your worker’s relationship to the firm. You’ll need to answer:

  1. Who is completing the form – the firm or the worker.
  2. Explain why you are filing the form. For example, if you are filing as a firm, you might have received a bill from the IRS for payroll taxes or you might be getting audited by the IRS.
  3. List the number of workers performing similar services to the worker in question.
  4. Select whether the worker gained employment through an application, a bid, an employment agency, or some other way.
  5. Attach copies of supporting documentation including:
    1. Contracts
    2. Invoices
    3. Memos
    4. Forms W-2 or Forms 1099-NEC (or Forms 1099-MISC, if applicable) issued or received
    5. IRS closing agreements
    6. IRS rulings

 

In addition, include details of any current or past litigation regarding the worker’s status. If no W-2 or 1099-NEC was issued, include information on the total compensation the worker received.

  1. Describe your business

 

 

  1. Provide details about any merger, reorganization, or sale or purchase of your business.
  2. Provide your worker’s title, and describe what they do for your business.
  3. Explain why you believe they are either an employee or an independent contractor.
  4. Detail any services the worker provided to your firm prior to the services in question.
  5. If the worker has a written agreement with the firm, then you’ll need to provide a copy of the agreement and describe the terms and conditions of the arrangement.

 

Part II: Behavioral Control

In this section, the IRS wants to understand the level of involvement or independence of the worker. Generally, the more independent a worker is, the more likely they are to be considered a contractor. You’ll need to tell them:

  1. What training and instruction are you giving your worker?
  2. How does your worker receive assignments?
  3. Who dictates how assignments will be completed?
  4. Who is the go-to problem solver when problems or complaints come up, and who is ultimately responsible for resolving the issues?
  5. What reports do you require the worker to submit to you – and provide examples.
  6. Describe the worker’s routine, including schedule and hours.

 

 

  1. Where does the worker do his or her work? If in multiple locations, provide percentages of time.
  2. Does the worker have to attend meetings and are there penalties for missing meetings?
  3. Is the worker required to do the work personally or are they allowed to subcontract out the work?
  4. If the worker needs someone to fill in or assist them, do they find the help or do you?
  5. Do you have to approve hiring additional workers?
  6. Who pays the additional workers?
  7. Do you reimburse the worker if they are paying the additional workers?

 

Part III: Financial control

In this section, the IRS asks how financially invested the worker is in your business and vice versa. Who carries the brunt of the financial risk? Who buys supplies? Who determines prices for the customers?

 

Here are the questions you’ll need to answer:

  1. List separately all supplies, equipment, materials, and property that are provided by you, your worker, and any additional third party.
  2. Does the worker lease space somewhere to work? If so, provide a copy of the lease and describe the terms.
  3. Explain any expenses the worker incurs while performing work on your behalf.
  4. List any expenses for which the worker is reimbursed by you or another party.
  5. Select the type of compensation the worker receives – salary, commission, hourly wage, piece work, etc.

 

 

  1. Does the worker have a drawing account for advances? If so, how often are they allowed to use it and what, if any, are the restrictions?
  2. Who does the customer pay directly – you as the firm or the worker? Do they pay the full amount to you or the worker, or do they pay a percentage to both you and to the worker?
  3. Do you carry workers’ comp insurance on your worker?
  4. Does the worker carry the risk of economic loss or financial risk, beyond loss of salary? Who is on the hook if equipment or materials are lost or damaged?
  5. Does the worker determine how much customers pay for your service or products?

 

Part IV: Relationship of the worker and firm

Now the IRS will ask about benefits, noncompete agreements, work instructions, and terms for termination. Things you’ll need to address:

  1. In the check boxes, select any benefits provided for your worker.
  2. Can either side terminate the relationship without penalty?
  3. Did the worker perform similar services for other firms during the time frame under discussion?
  4. Are there non-compete agreements in place in any way, shape, or form?
  5. Is your worker a member of a union?

 

 

  1. What advertising or marketing does the worker do for you, if any?
  2. If the worker is remote, who provides materials, patterns, instructions, etc. for the work?
  3. What does the worker do with the finished product? Send it to you? Send it to the customer? Something else?
  4. How does the firm represent the worker to the public – do you call the worker a contractor, an employee, a representative, etc.? And under whose name does the worker perform his or her services?
  5. If the relationship has been terminated, under what circumstances did the termination occur?

 

 

At this point, unless your worker is a salesperson or providing a service directly to customers, you will skip over Section V and sign the form.

Section V: For service providers & salespersons

If you are working with a salesperson or someone who delivers services directly to customers, answer the questions in Section V:

  1. What responsibility does your worker have in soliciting new customers?
  2. Who provides the worker with sales leads?
  3. What, if any, are the reporting requirements regarding leads? Describe them.
  4. Does the firm require specific terms and conditions of sale? If so, what are they?
  5. Do customers submit orders to the firm, and does the firm have final approval on orders?
  6. Who defines the worker’s sales territory?
  7. Does your worker pay for the privilege of serving customers?

 

 

  1. Where does the worker solicit sales?
  2. What products or services does the worker distribute? If there are multiple services or products, which one is the core of the business?
  3. Does your worker sell life insurance on a full-time basis?
  4. Does the worker sell other kinds of insurance for you? If so, what percentage of time is spent on the other types as a group?
  5. If your worker solicits orders from other entities, provide the percentage of time they spend doing that.
  6. Is the merchandise purchased by your customers used for resale or in their business operations?

 

 

Once completed, you’ll need to file the Form with the IRS. Don’t forget to sign and date.

 

Filing Details

Just a few notes on how to file Form SS-8 once you’ve completed it:

  • Faxed, photocopied, or electronic versions of the form will not be accepted, so you’ll need to mail the hard copy. Remember to keep a copy for your records.

 

It should be mailed to:


Internal Revenue Service
SS-8 Determinations
PO Box 630, Stop 631
Holtsville NY 11742-0630

 

  • There is no fee for filing.
  • Do not submit the form with your tax return. According to the IRS, that will likely cause delays in processing time.
  • You need to use a real signature at the end of the form and write in the date. Stamps are not acceptable.
  • If you are a corporation, you’ll need an officer to sign the form. If you are a trust, partnership, or LLC, you will need to have a trustee, general partner, or member-manager with personal knowledge of the facts to sign the form.

 

Once you complete the form, you’ll wait to hear from Uncle Sam on the status of your request.

What happens after you file a Form SS-8?

After you file form SS-8, the IRS will review the form and come to a determination of the worker’s employment status. They will then send you a letter detailing their determination, and you can begin treating the worker as either an employee or an independent contractor.

 

If they are determined to be an employee, you’ll need to adhere to all employment laws, including withholding the appropriate income and employment taxes, offering legally required employment benefits, and insuring the worker appropriately. If they are determined to be a contractor, you do not need to withhold employment and income taxes or offer employment benefits, but you may still be interested in insuring them or their work, depending on their responsibilities.

 

Once their status has been determined, it may be worth using a reputable payroll software to make managing the worker’s employment or contractor relationship easy and stress-free.

 

How long does it take for the IRS to process Form SS-8?

The IRS’s processing times can vary significantly, but the IRS website states that it can take “at least 6 months to receive an IRS decision.” Six months is a long time, so if you need to file Form SS-8, make sure you file it as early as possible.

 

If you have not received a determination before you file your tax return, the IRS says to file the return anyways. If their decision contradicts what your tax return said, they require you to file an amended tax return to report the difference. If their decision aligns with your tax return, then no further action needs to be taken.

Value and simplicity

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— Tyler McCardell, Wakefield EMS

What is an SS-8 determination?

A Form SS-8 determination is the IRS’s decision related to the employment status of one or more of your workers. Generally, they will be determined to be either an employee or an independent contractor.

 

What happens after an SS-8 determination?

Once the IRS makes an SS-8 determination, your treatment of the worker(s) should reflect the IRS’s decision. You should only consider changing the worker’s employment status if there is a significant change either in the nature or scope of their responsibilities, or in their relationship with you as their employer. If this happens, you can file another Form SS-8 to get a new determination, or you can treat them the same way that you treat other workers with similar responsibilities.

 

Whether you’re hiring your first employee or contractor, or your thousandth, employment questions will always come up. If you need help understanding whether a worker should be treated as an employee or a contractor, filing Form SS-8 can help.

 

If you want more information on Form SS-8, or need help filing it, visit the IRS website or consult your CPA or tax advisor.

 

This article is for informational purposes only and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors for formal consultation.

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Erin Ellison is the former Content Marketing Manager for OnPay. She has more than 15 years of writing experience, is a former small business owner, and has managed payroll, scheduling, and HR for more than 75 employees. She lives and works in Atlanta.